12 Questions
What are the two main tools of fiscal policy?
Government spending and taxation
Which of the following is NOT a type of market failure?
Inflation
Which of the following is a strategy for pollution control?
Subsidies
What is fiscal federalism?
Fiscal relations between different levels of government
What is the main objective of a government budget?
All of the above
Which of the following is a major source of government revenue?
Direct taxes
What is the primary goal of resource allocation?
To maximize social welfare
What is a characteristic of public goods?
They are difficult to provide through markets
What is an example of a negative externality?
Pollution
What is an objective of government policies in the economy?
To promote growth, reduce inequality, and ensure stability
What is a strategy for efficient allocation of resources?
All of the above
What can cause market failures?
Monopolies and externalities
This quiz covers the role of government in the economy, fiscal policy, monetary policy, and government interventions to mitigate market failures. Learn about how government decisions impact the economy and address market inefficiencies.
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